Survey: Appetite for Life Insurance is High, but Conversation Level is Low

When Rob Sims was drafted to play professional football, he had some idea what to expect – his father, Mickey, had played professionally as well.

What came next, though, was unexpected.

Mickey passed away a month later, and Rob had to grow up quickly and be the man of the family.

But then Rob saw that Mickey had found a way to stand by him, after all. He saw how his father’s life insurance and other benefits helped his mom and sister, and it eased his mind to know they were provided for when he was away starting his football career.

That experience led him to make life insurance the foundation of his own financial plan. “Everybody should have life insurance,” Sims says. “It’s the gift that keeps on giving.”

Making it a main dish

Rob’s opinion is shared by 34 percent of Americans who, when asked to compare life insurance to parts of a family meal, said it was the “main course” in their financial plan. Almost one in five, 18 percent, likened it to a nice-to-have dessert, 16 percent an appetizer for when you’re starting out, and 8 percent considered it a good-for-me-but-I’ll-pass vegetable side dish.

These results are among the key findings of a Harris Poll conducted on behalf of State Farm, which explored attitudes towards life insurance as part of a Life Insurance Awareness Month program in September.

Conversation plus action is key

Sometimes we’re shocked into awareness. When Sonia fell into a coma, her mother and young children had no idea what would come next and had to scramble to make ends meet. Fortunately, Sonia got a second chance. Recognizing the narrow miss when she recovered, she purchased life insurance to help ensure her family wouldn’t face such hardship again.

Sonia’s story reflects a number of realities in the insurance market today: People want to protect their families, but often aren’t taking action and discussing topics like life insurance and estate planning across generations.

A large majority (84 percent) of Americans believe life insurance is a smart way to care for their family’s future and 48 percent say it has been an important part of their family’s plan for generations. However, it is a difficult topic to discuss. Of those with living parents, only 42 percent of Americans have talked with their parents about life insurance and estate planning and 14 percent are planning to initiate a conversation.

Interestingly, despite generational differences, the survey revealed attitudes towards life insurance are fairly consistent across the generations – respondents in all age categories viewed life insurance as an important part of their financial mix and they tended to view it as an asset rather than as an expense.

This follows the overall trends in life insurance, said Mark Morris, a public relations consultant with life insurance industry group LIMRA. “Our research has shown that four in ten people buy life insurance because of a life event – getting married, buying a house or having children,” he said. “Ownership is pretty consistent [across generations] once they have that life event.”

The biggest difference, Morris said, is when the generations are having those events – generally later for Gen X and much later for Millennials than for the Baby Boomers decades ago.

Other key survey findings

Most Americans (76 percent) say their family would be financially protected if the unexpected were to happen to them.

Many are unclear how financial products like permanent life insurance work – 46 percent were unsure if they could borrow against the cash value of a permanent life insurance policy, and another 11 percent incorrectly believed they could not.

While the survey found many similarities across generations in attitudes towards life insurance, the way people expect to interact with their insurance provider is evolving. LIMRA’s Morris noted that all age groups, especially younger generations, are interested in learning about and managing policies online and via mobile device.

“Are the needs of the different generations similar? Yes,” he said. “But their demands of insurance companies are changing.”